James River Coal (JRCC) Hits One-Year Low After Sudden Late-Day Plunge

NEW YORK (TheStreet) -- James River Coal  (JRCC) fell 19.09% to 89 cents on Monday after the stock suddenly plummeted shortly after 3:30 p.m.

The stock hit a one-year low of 84 cents, with over 2 million shares changing hands, more than double its average daily volume. It hit a high of $1.13 for the day and has a one-year high of $3.50.

The stock hovered around its previous closing price of $1.10 for much of the day until the sudden plunge at the end of the day.

TheStreet Ratings team rates JAMES RIVER COAL CO as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate JAMES RIVER COAL CO (JRCC) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, poor profit margins, weak operating cash flow and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Currently the debt-to-equity ratio of 1.72 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, JRCC maintains a poor quick ratio of 0.96, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, JAMES RIVER COAL CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for JAMES RIVER COAL CO is currently extremely low, coming in at 3.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -16.98% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$23.40 million or 183.35% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • JAMES RIVER COAL CO's earnings per share declined by 23.7% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, JAMES RIVER COAL CO reported poor results of -$3.99 versus -$1.19 in the prior year. For the next year, the market is expecting a contraction of 24.8% in earnings (-$4.98 versus -$3.99).
  • You can view the full analysis from the report here: JRCC Ratings Report
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